Baybutt President Frederick L. Baybutt was in a federal court room in Manchester, N.H., Thursday, according to the Keene Sentinel, claiming that all of his company's problems started when the Co-op failed to pay its bills during the store's recent $9 million renovation project.

Baybutt Construction, of Keene, walked off a number of jobs in Brattleboro and Bellows Falls, as well as in Keene, N.H., and Nantucket, Mass., after the company ran out of money earlier this year and subcontractors in all three states say the company owes them hundreds of thousands of dollars.

In court Thursday, Baybutt said all of his company's problems started when the Co-op fell behind on its payments, the Sentinel reports, and Baybutt said the financial problems "snowballed" from there.

Baybutt told the court that slow sales contributed to the Co-op's late payments, but Brattleboro Food Co-op Project Manager Tom Appel explained that slow, or robust, sales have nothing to do with being able to pay a construction company on a major project.

For a project like the one the Co-op took on, all of the loans and grants are secured before the first shovel is put in the ground, and the bank releases the money as the bills start to come in.

"Our ability to pay has nothing to do with cash flow," said Appel.

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"The Co-op paid all its bills on time."

Appel said under terms of the agreement between Baybutt and the Co-op, the store had up to 20 days to pay its bills once all of the required paper work was submitted, and on average the Co-op paid its bills in two or three days.

He also said that more often than not, Baybutt was late submitting all of its paper work, which would delay the process.

Baybutt ran into trouble while working on the Rockinigham Free Library in Bellows Falls as well as while renovating the Vermont State Office Building in Brattleboro.

At both sites subcontractors stopped showing up after Baybutt failed to pay them for the work that had already been completed.

Co-op Shareholder and Community Relations Manager Sabine Rhyne said the Co-op paid its bills as they came in, and it was not fair for Baybutt to pin its problems on the Co-op project.

"The Brattleboro Food Co-op enjoyed a good working relationship with the Baybutt job personnel and all of the subcontractors during the long and complicated process of building the new Brattleboro Food Co-op/Windham and Windsor Housing Trust project," she said. "All completed requisitions were turned around in quick order, and the Co-op has consistently fulfilled all of its obligations. The final resolution of the project is now in the hands of the bond company."

Baybutt also faced some tough questions in court Thursday about the $21,000 Rockingham officials say they paid for performance and payment bonds for renovation work on the local library, which is supposed to cover contractors in the event that Baybutt runs into trouble.

The Sentinel reports that Baybutt thought Rockingham officials had decided they did not want to purchase the bond, and he said he did not know why Rockingham paid his company the money anyway. And when he was asked where the money went, Baybutt said he'd have to check his records, according to the Sentinel.

Janice Mitchell-Love, chairwoman of the library's board of trustees, said Baybutt's statement contains only a kernel of the truth.

She said at a meeting prior to the beginning of the project, a Baybutt official told the renovation committee -- made up of some library trustees and community members -- that the town could save $21,000 by not purchasing the bond, and Sheerr McCrystal Palson (SMP) Architecture, Inc., the firm that was also acting as a clerk of the works, agreed with Baybutt.

The renovation committee made a recommendation to the library trustees not to purchase a bond, but the trustees rejected it.

"We said, ‘We don't feel comfortable not getting a performance bond,' and voted to get it," she said. "Baybutt said it was purchased, SMP said it was purchased, and we thought it was purchased."

Mitchell-Love laughed when told about Baybutt's statement, calling it "interesting."

Lebanon, N.H., attorney Howard Myers was in the courtroom Thursday representing ARC Mechanical, which is owed more than $190,000 for the Rockingham Free Library job.

Myers said Thursday's hearing was only the first of what will likely be a long and complicated process as the contractors across New England try to get the money they are owed from Baybutt.

"Baybutt said the town waived the bond, and when I asked him if the town asked for its money back he said he did not know," Myers said. "He was not very specific on the issue. We only learned a very little bit of information. It was not very enlightening."

Reformer reporter Domenic Poli contributed to this article.

Howard Weiss-Tisman can be reached at hwtisman@reformer.com, or 802-254-2311, ext. 279. You can follow him on Twitter @HowardReformer

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